It is clear the cow-calf producer is entering a period of profitability without precedent in the beef industry. Consider these issues:
- More than 150,000 brood cows left Texas last year because of the drought conditions on the high plains; and that was only the ones that left Texas. That total is twice the number of beef cows in Pennsylvania.
- Exports of beef and beef products from the U.S. were up 37 percent in 2011 and are predicted to go higher as Asian customers gain personal spending ability from high-performing economies.
- The U.S. cow herd is at the lowest level since 1952.
- Heifer retention is slowly increasing. That means there will be even fewer feeder cattle available in the next four to five years because there are fewer cows producing calves, and the heifers being retained will not enter the feeder calf market.
- Subsidies for corn for ethanol production have disappeared.
- Canada and Mexico are having their own problems with supply, so fewer feeder cattle will be imported from those sources.
The collective result of all these issues is that the value of a feeder calf in the next few years will likely be at a record price. Since corn does not drive the cost of production in the cow-calf enterprise, the door is now open to be very profitable. Why not make a good time a great time to cash in on this market? Here are five steps to making an even greater profit from your herd.
Have the herd ready to get bred for the 2013 calf crop. This may seem backward, but it will be essential that cows calving now get another calf on the ground in 2013. Cow condition now is the key to making sure she can be bred back, especially for young cows. One cannot starve a profit into a cow herd, so spending money now to get cows in better shape - if they need it - will be profitable. We will leave too much money on the table in future years by just sitting back and enjoying the market this year and imagining it will happen the same way next year. See "Beef Cow Nutrition Before and After Calving" at www.das.psu.edu/research-extension/beef/pdf/Beef%20Column%20for%203-09.pdf.
Keep the calf alive this year. There is no greater economic loss to the cow herd when you feed a cow for a year, get her bred, and then lose a calf. Checking the cows regularly for any sign of calving trouble (which can be a double loss from calf loss and failure to rebreed) is profitable time spent. Make sure all calves get a good intake of colostrum within 24 hours after birth. Treat calves quickly and correctly at the first sign of scours or other disease. The up and down temperatures and mud we have had in the region this year is a clear sign that diseases like scours and pneumonia can occur. Provide a dry place for the calves out of the wind, and try to keep cows out of the mud so udders stay as clean as possible. See "Preparation for Calving" (www.farmingmagazine.com/article-7767.aspx) and the "The Calving Toolbox" (www.farmingmagazine.com/article-4499.aspx).
Get the cows bred. There are three factors that determine if a cow gets bred: Cows that are cycling, cows having a fertile heat cycle, and having a successful mating from a bull. These factors are multiplicative and not based on averages. In other words, each one of the factors can be 95 percent in place, but only 86 percent of the cows will actually be bred. Our work with the heifer development program in Pennsylvania has shown cycling cows and fertile heat cycles are not always the same. This is a time when there should be no excuse for not having enough bulls in the pasture. Bulls are cheap investments for the cow herd, particularly in a market where a lost mating or a delayed mating can be so costly. For example, the failure to have a successful mating for fertile heat cycles in only five cows in the herd will cost $300 in lost weaning weight for missing just one heat cycle. Lame, sick, infertile or injured bulls in a pasture with these calf values can create huge losses income in the current market. See "Most Valuable Investment in the Beef Herd" (www.farmingmagazine.com/article-2816.aspx) and "Reproduction by the Numbers" at www.farmingmagazine.com/article-5387.aspx.
Spend money and time on stuff that counts. Vaccines are the cheapest source of insurance there is against cow and calf losses. Work with your veterinarian to develop a health plan for the herd and stick to it. A colleague told me the other day they had bought a load of feeder cattle, and when all the cattle and transportation bills were paid, the average cost for each calf in the lot was $1,026. A yearling steer this spring is expected to cost $1,250 by the time it reaches the feedlot. For a cow-calf producer, a $7.50 vaccine is a small price to pay for you to miss out on just one calf getting on the truck at weaning. Steer calves are always more valuable than bull calves, so get them cut. Use a knife, and use it early. Castration with a knife soon after birth is easier on both you and the calf, and rubber bands are a source of trouble for calf performance, castration failure and possible infections. Have a functional working chute on the farm so when vaccination, animal examinations and animal treatments need to be done, it will be done in a timely and safe way.
Get more pounds returned from every cow. The most important economic measure in the cow-calf enterprise is getting the most pounds sold for each cow that was bred to produce that calf crop. The cow is the income generator on the farm, so getting more calves across the scales after you have fed that cow for a year to reach that payday is key. It is not always a function of weaning weight. As shown above, getting a cow bred and weaning a live calf is a reproductive function first, so reproductive failure in one cow will diminish the value of a 600-pound calf from another cow. Two 350-pound calves will return more dollars than the one 600-pound calf.
However, there are tools available to make sure there is an optimum level of pounds across the scales at weaning. Crossbreeding is free money when done the right way. Heterosis provides free weight to sell, but only when there is a planned process with the right bulls in the pasture. Growth-promoting implants are also free money. With the current value of feeder cattle, one $3 implant can return upwards of $20. There are some "natural" markets for calves, but most of the premiums for "natural" calves that have not had implants is still being realized by the cattle feeder and not the calf producer. Genetics, particularly from bull selection, will improve weaning weights. The selection of bulls that will add growth now and more growth and milk for heifers in the future can be done without adding birth weight or other traits that could be detrimental. Use the genetic prediction information available on bulls to help make those selections. See "Crossbreeding Is A Good Idea" at www.farmingmagazine.com/article-5222.aspx.
This is a unique time to be in the beef business, and the cow-calf producer is going to be in the driver's seat for the next few years. It is time to make good times great times.
Dr. John Comerford is associate professor of dairy and animal science at the Pennsylvania State University.